Home loan approvals have rebounded in June following May’s interest rate cut, but growth fell slightly short of economists’ expectations.
The number of approvals rose 4.4 per cent in the month against expectations of a 5 per cent lift. The result came after a sharp 7.3 per cent decline in May.
“Lower rates have provided an immediate boost to the housing market, particularly in the eastern states,” Westpac senior economist Andrew Hanlan said.
“This is evident from auction clearance rates and house price gains.”
There were 52,672 approvals in June, compared to 50,366 approvals in May, according to seasonally-adjusted figures released by the Australian Bureau of Statistics on Friday.
The value of total housing finance rose 2.8 per cent in the month to $32.065 billion, while loans by owner-occupiers for the construction of new homes dropped 0.4 per cent.
Mr Hanlan said the improvement was driven by approvals in established housing and in the states of NSW and Victoria, “consistent with other housing market indicators”.
But on a 12-month basis he said approvals were broadly flat, down 1.3 per cent.
“Affordability concerns have acted to temper the owner-occupier market,” he said.
In trend terms, which strips out month-to-month volatility from the figures, the number of home loan approvals dropped marginally, slipping 0.6 per cent during the month.
Meanwhile, the total value of loans approved for property investors declined in June, falling 0.7 per cent to $13.507bn.
“The regulator is working with the banks to tighten lending criteria for the investor market, which will potentially impact finance figures during the second half of this year,” Mr Hanlan said.